Gas flares, oil companies and politics

Feb 18, 2002 01:00 AM

by Chijoke Evoh

Oil production has been going on in Nigeria for over 45 years together with the flaring of natural gas. Understanding
why this unsustainable practice has lasted for such a long time in the country entails the unravelling of the
dynamics of the influence of multinational corporations over natural resource management in developing
countries.
It must be emphasised that the entire issues of curbing gas flaring or terminal gas flares boils down to one
question: Who manages natural resource exploitation in Nigeria, the government or multinational corporations?
Associated gases are routinely flared in the course of producing and processing oil. Flaring is a means of safely
disposing of waste gases through the use of combustion.

With an elevated flare the combustion is carried out through the top of a pipe or stack where the burner and igniter
are located. This is a common practice in the oil production process. Hence, it is not necessarily an ecological or
social crime to flare gas. However, the Nigerian case attracts more attention given the volume of gas flared since
the beginning of commercial oil production in the country.
For instance, when compared with oil production in the advanced countries, data collected by the Alberta Energy and
Utilities Board (EUB) in Canada shows that in 1996 about 92 % of gases were conserved or used in some manner. The
remaining 8 % was flared. This socially responsible attitude towards gas conservation, as demanded partly by
environmental requirements in Canada and other advanced countries, does not apply in Nigeria.

Nigeria has an estimated 180 bn cf of proven natural gas, making it the ninth largest concentration in the world. Due
to unsustainable exploration practices coupled with the lack of gas utilization infrastructure in Nigeria, the
country flares 75 % of the gas it produces and re-injects only 12 % to enhance oil recovery. It is estimated that
about 2 bn cf of gas is currently being flared in Nigeria -- the highest in any member-nation of the OPEC. This is an
enormous flare amount. Consequently, and going by the current statistics, Nigeria accounts for about 19 % of the
total amount of gas flared globally.
In the more than 1,000 oil fields located in the Niger Delta region of the country, the towering flames resulting
from gas burning now seem to the local villagers as an inevitable consequence of oil production without any health or
environmental risks. It is not surprising that the dangers of decades of intensive deflagration in the region attract
little attention from the local communities compared to other effects of oil production such as oil spills, which
have immediate degradation effects on the ecosystem. The effects of gas on the environment are negative.

The main impact that sour gas has on the environment comes in the form of acidic rain. The incineration of sour gas
(hydrogen sulphide) produces sulphur oxides, which are released into the atmosphere. The end result of these
compounds when they combine with other atmospheric components, namely oxygen and water, is what is called acid
rain.
Acid rain produces several negative effects on the world in which we live. Considering the great health and
environmental implications of gas flaring, the ministry of state for the environment proposed for the year 2003, the
application of zero gas flares policy in Nigeria.
Oil producing companies in the country jointly attacked this policy proposal as technically infeasible. In a
communique at the end of their meeting, the oil companies argued that accelerating the flare programme is a national
policy and an issue of great economic importance that requires huge investment for the acquisition of the required
technology.

In effect and following the pressure of the oil companies, the government withdrew its initial 2003 deadline and
extended it to the year 2008. Such a compromise on the part of the government makes one wonder how committed these
companies are to attaining terminal flare in the next six years -- an objective they have been so reluctant to
accomplish in the past four decades.
This action on the part of the government to satisfy the oil companies came as no surprise in view of the "sacred
bull" status of such companies in the country. Such corporate-government romance, especially when it comes to oil
matters, is not a new phenomenon. Poor oil producing communities have always had to deal not only with the nonchalant
attitude of oil companies towards their well-being, but also with the betrayal tendencies of their political
leaders.
This is partly the reason for the vicious struggle for control and management of the country's resource, especially
its oil reserves, with each state demanding a larger share of the oil revenue. However, it must be emphasised that
politics finds expression in more than policy pronouncements. It should also be evident in the creation of the
necessary climate where policies can take root and flourish for the immediate good of the masses.

It must be pointed out that nowhere in the world, particularly in developing countries, have policies concerning
natural resource exploitation been welcome by multinational companies involved in such activities. Their demands for
relaxed regulatory policies are almost insatiable and this normally proves detrimental to the social and
environmental conditions of the immediate communities. Oil producing communities in Nigeria are not an
exception.
By implicitly acting according to the dictates of the oil companies, the Nigerian government has continued to
relegate the health and environment well-being of Nigerians to the background. This policy of accommodating the oil
companies at all costs and by all means in the country bears outrageous costs. It is a dangerous trade-off between
economic gains on the one hand and public and environmental health on the other, which have longer-term consequences
that are highly destructive.

The indispensability of oil revenue to the development of Nigeria is not in question, particularly given thatthe
country derives about 90 % of its export earnings from the sale of the commodity. Rather, what is questionable is the
claim of the oil companies that technologies needed to diminish gas flaring is presently beyond their reach, hence
their demand for sufficient time to acquire it.
Such argument raises some logical questions.
First, are the oil companies just realising that gas flaring is a problem in Nigeria after decades of activities in
the country, and if not why have they not been working on the technology to curb the problem over the years?
Second, are they planning on developing a special technology to take care of gas flaring in Nigeria separately from
those used in other parts of the world, especially in the advanced countries? What accounts for less gas flare in
other oil producing countries when compared to Nigeria?
Answers to these questions may lie on both the oil companies and the Nigerian governments, part and present.

The International Affairs Institute (IAI) and OCP Policy Center recently launched a new book: The Future of Natural Gas. Markets and Geopolitics.

The book is an in-depth analysis of some of the fastest moving gas markets, attempting to define the trends of a resource that will have a decisive role in shaping the global economy and modelling the geopolitical dynamics in the next decades.

Some of the top scholars in the energy sector have contributed to this volume such as Gonzalo Escribano, Director Energy and Climate Change Programme, Elcano Royal Institute, Madrid, Coby van der Linde, Director Clingendael International Energy Programme, The Hague and Houda Ben Jannet Allal, General Director Observatoire Méditerranéen de l’Energie (OME), Paris.

For only €32.50 you have your own copy of The Future of Natural Gas. Markets and Geopolitics. Click here to order now!